Friday Five - The Pharma Week in Review

The long running narrative that is Pfizer's organisational structure (which for much of the past decade has focused on whether the company will split into a number of separate businesses) has turned another page; the company announced on Wednesday it will reorganise from two into three business units effective 2019, focused on innovative drugs, established medicines and consumer healthcare. These will replace the current innovative health and essential health units.

Notably, the innovative medicines segment will include biosimilars (currently included within the essential health business), as well as a new hospital business unit for anti-infective and sterile injectables.

CEO Ian Read described the new structure as "a natural evolution…given the ongoing strength of our in-market products and our late-stage pipeline and the expected significant reduction in the impact of patent protection losses post-2020." Pfizer said the new established medicines unit will operate with "substantial autonomy," and will have distinct and fully-dedicated manufacturing, marketing and regulatory functions. Management continues to evaluate strategic alternatives for its consumer healthcare unit, with a decision expected this year.

Analysts at Deutsche Bank described the changes as "not major, but logical," while greater independence for the established medicines business retains a clear pathway towards potential separation (if value enhancing) at a later date, noted analysts at Credit Suisse.

They also suggest that by moving biosimilars into the innovative medicines business, Pfizer eliminates one inefficiency, whereby separate sales and marketing teams are currently interacting with the same customers. The decision also reinforces the view that Pfizer will treat biosimilars as brands rather than commodity products and look to leverage its strengths in sales and marketing.

The company said it will be looking for out-licensing partners for its antibiotics programmes, but declined to disclose how many programmes will be dropped. The reorganisation will result in about 140 lost jobs, with only the antibacterial and antiviral research groups being "impacted in their entirety."

It's no secret that the unique hurdles that face antibiotic development have made the therapeutic area a poor investment for pharma. But the news is still a significant blow, given that Novartis was one of relatively few large-cap companies invested in antibiotic discovery.

The exit of another pharma from the therapeutic space certainly isn't for lack of effort from regulators and lawmakers to create incentives. The FDA had recently proposed a licensing system that could lock-in hospital systems to a set number of doses of a new antibiotic, which could help abrogate the revenue problem of last-line use for novel products (see ViewPoints: For its next trick, FDA targets antibiotic incentives).

From the clinic

Targeting beta amyloid plaques as a potential means of treating Alzheimer's disease remains the subject of considerable debate; one that has tilted heavily away from advocates as the number of clinical study setbacks has accumulated. Against this backdrop, positive 18-month data from a Phase II trial of Biogen and Eisai's BAN2401 has raised expectations once again - though with full results yet to be presented (until later this month), there is considerable scepticism that these data represent a material breakthrough remains.

From the front-lines

Provisional results for BAN2401 should provide encouragement at the least, one key opinion leader told FirstWord this week, citing "a dose-dependent effect on both therapeutic benefit per the ADCOMS scale and biomarkers like PET imaging for amyloid." More here.

Feedback from 35 HIV prescribers indicates that Gilead Sciences' Biktarvy has strong momentum in the US market six months post-launch, while our snap-poll of 33 US oncologists suggests Array BioPharma's combination of Braftovi and Mektovi could emerge as a key competitor to Novartis' Tafinlar/Mekinist pairing in the melanoma market.

Celgene and bluebird bio plan a route for earlier-stage CAR-T use in myeloma

Regulatory recon

On the subject of gene therapy, the FDA unveiled a new regulatory framework to promote and support product development this week. Analysts at Jefferies said "we think the documents suggest FDA willingness to be flexible in the design of trials and endpoints and to accept some level of uncertainty around some gene therapies prior to the time of approval (in relation, for example, to long-term durability and safety). Although this may decrease the development time for gene therapies and increase the probability of success, we reiterate that these products still have to work and eventually show a tangible clinical benefit to get full approval and justify pricing."